Will your job be replaced by an app?

Gone are the days where most people could pledge their lifetime to one company, which would then provide them with a pension in their old age. Today’s marketplace is more fast-paced than ever, which is good, because this leads to real progress.

Pick up your smartphone and look at all the apps on there….how many functions that they provide used to be done by an employed person? Stock brokers, travel agents, bank tellers, fast-food order takers, etc, have seen job losses because you can now do those functions on your phone by yourself. This is a good thing, because you have more freedom and choice, which helps you save money.

As far as those job losses, we all need to keep our skills current.

First of all, think about your marketable skills…and ask yourself how many others can perform that same skill. If they can, that person is your competitor, and may be willing to do that job for a lower wage. The more of those people there are, the lower the wages for that skill will go, due to a high supply of that skill. Look at the recent battle between unionized taxi-cab drivers and independent people who provide the same service via Uber and Lyft. Taxi drivers are losing their business, except in those cities where the government has stepped in and blocked Uber and Lyft drivers, subverting a free market…in those cities, taxi drivers have benefitted but consumers and private drivers have lost. Such authoritarian measures will likely not stand the test of time. Obtaining an in-demand skillset always stands the test of time.

Then second, think about whether technology can provide that skill in a meaningful way. If so, demand for those human skills will drop, leading to lower wages. Here are a couple examples: If you owned a bank, and one $100,000 ATM with a $15,000 yearly maintenance contract could replace six $50,000/year employees, you spend $115k/year instead of $600k/year…you increase your margin by almost $200,000. Or if you are a mom-and-pop restaurant owner, and you can place ten $300 tablets on the tables for people to order themselves instead of hiring a couple $30,000/year employees to take these orders: you save thousands for your business and family and you can get ahead financially. Such decisions are a no brainer.

Like they say in the airplane emergency drills, put on your own oxygen mask before helping someone else. You can help many more people once your own financial lungs have enough oxygen.

There is a disconcerting element to estimating the number of new jobs created each month in the United States. Not because the number is difficult to forecast, but rather that there is a perpetual sense of pessimism about the prospects for better job growth in the future. And as an economist who studies the composition of the labor force and is familiar with how technology can displace jobs, I am frightened by what I see. Since the economic peak just before the recession, the US production of goods and services has grown by 5 percent, yet total employment remains below prerecession levels, with many of these jobs lost to technology. A look at the Labor Department’s statistics suggests we should expect more of the same.